Contrary to Thomas Hobbes, who distrusted human nature and, therefore, supported absolutism or, a monarch's absolute control over a populace, John Locke believed that human beings were innately rational. According to Locke, people could use their good sense to form societies based on mutual respect for each other's rights to life, liberty, and property. These ideas, as you have probably guessed, were fundamental to the thinking of the American Founding Fathers.
This understanding of mutual respect and the right of others to exist is the 'social contract.' This is not to be confused with the ideas laid out in Jean-Jacques Rousseau's book The Social Contract. While Locke and Rousseau agreed on human beings' essentially good nature, Rousseau rejected society altogether, arguing that it corrupted people's natural goodness. Locke, on the other hand, thought that people could form a functioning society by using their capacity to reason. This capacity could help them to discover and understand their God-given natural rights.